Binance CEO CZ tweeted that the company is considering an accelerated burn. Such a program would make the Binance token (BNB) even scarcer than before. It is currently the #9 token by market cap.
On Dec. 20, 2020, CZ of the giant exchange Binance announced that the company was considering doing an accelerated burn of BNB coins. This move will likely increase the value of each BNB while maintaining the market cap.
And as ElijahBoom responded on Twitter, this could be a move to scoot BNB up from its place at #9. After all, with a predicted increase in token price, a lot of buying power could enter the market and further increase the BNB market cap.
Burn baby burn
On Oct. 17, 2020, Binance announced a major token burn. This, the 13th such burn, destroyed over 2 million BNB tokens, an equivalent of about $68 million. At the time, this was the largest burn in terms of fiat value.
In recent months, BNB has struggled to stay afloat near its all time highs. With the rise in DeFi and other side chains to compete with Binance Chain, the company does have to keep things interesting to remain a (if not the) market leader. This could be a move to keep attention on the utility token.
As of writing, the price of Binance Coin is up about $4 over a 24 hour period. If this tweet was meant to increase the price of BNB, then it worked.
In recent weeks, Binance has been preparing for regulation across the globe. The company publicly touted they were reading their services for complete compliance with regulations in France.
Likewise, Binance has cracked down on US accounts that were accessing the main Binance.com site (rather than the regulated Binance.us site) since 2019. This has been seen as a move to make Binance universally regulated.
Also in a way to appeal to regulators, Binance recently joined the Blockchain for Europe Association. This group aims to help crypto companies play nice with European financial institutions.
Aside from dodging legal troubles, this could create some opportunities for the company. While Binance is valued around $1 billion, it could grow larger. Recently, Coinbase filed for its IPO and was found to be worth near $28 billion. Perhaps pleasing regulators (as Coinbase did before its IPO paperwork) is a step in the process of going public. That could be a multi-billion dollar venture.